Wisconsin native, conservative critic of everything.
"Once abolish the God, and the government becomes the God." ---G K Chesterton
"The only objective of Liberty is Life" --G K Chesterton
"Fallacies do not cease to be fallacies because they become fashions" --G K Chesterton
"A man can never have too much red wine, too many books, or too much ammunition." -- Rudyard Kipling

Sunday, November 04, 2012

The End of SCOAMF

Krauthammer, Barone, George Will, and Romney's political guru are all saying the same thing.

5 comments:

Wisconsin's independent voters should consider the fact that, in many respects the current recovery mirrors that which took place in Reagan's first term; with two significant exceptions:

1. In the last 2 years of Reagan's first term public employment at the state and federal level increased significantly. In other words Government got bigger and employed a lot of people, driving down unemployment.

Public employment under Obama has remained virtually static at the Federal level, is declining now and has shrunk significantly in other sectors (State, county & local). This is accompanied by a predictably stifling effect on unemployment rate reductions.

2. In the last 3 years of Reagan's first term Federal spending increased significantly (because it could), pumping massive amounts of capital into the economy in the mother of all stimulus packages. This injection of capital spurred growth and helped create jobs, albeit at the cost of significant annual deficit increases.

In the last three years of Obama's first term, Federal spending has SHRUNK (yes, really) as a percentage of GDP. Having come into the recession with staggering deficits already in place and a total debt that had doubled under the previous, 'conservative' administration; there was no option for the massive annual injection of new spending that Reagan utilized. Note that while deficits have remained high over the past three years, this is primarily due to revenue losses due to the recession NOT spending increases.

Other significant metrics, such as the creation of new private sector jobs and overall unemployment rate are almost identical. Unemployment was 0.3% lower at the end of October 1984 than when Reagan took office. It currently stands virtually equal to the 7.8% rate that existed when Obama took office. Both Presidents experienced a sharp increase to over 10% during their first 3 years and both saw that increase offset by election time.

But, under these numbers lies yet another difference. The drop in employment was in full swing and much sharper in 2009 than in 1981-82. In fact, unemployment was DROPPING when Reagan took office. The economy had added 10.1 million jobs during the Carter administration. This trend reversed and unemployment spiked mid-way through Reagan's first year. So Reagan inherited a growing economy, which then reversed course, went into a soft decline and recovered again during his first term.

Overall job losses (since the beginning of the down-turn in 2008) inherited by Obama were 256% of those Reagan oversaw, then overcame. In short the problem faced by Obama was 2 1/2 times as large as the one Reagan faced and the recovery path has been largely parallel.

Are we yet where we need to be? No, certainly not but we now are faced with slowly rebuilding a new, real economy without the aid of new spending and new public employment. Of course it will be slower, but it may, if we are patient enough to wait for it, prove to be stronger and longer.

GOP strategists hope that Independent voters will look at the issue simplistically, ask "did Obama solve the problem completely?" and vote accordingly. I think Wisconsin's independents are smarter than that. I think they can and will assess the broader, complex reality and vote to continue our sure, steady climb out of the abyss of the Bush years.

The above facts are derived from the following BLS data series:CES3000000001LNS14000000CES9091000001CES9092000001

Go to the Bureau of Labor Statistics website and enter the series number under "databases and tools".